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Federal Highway Administration > Publications > Public Roads > Vol. 59· No. 2 > TQM: It Really Works!

Autumn 1995
Vol. 59· No. 2

TQM: It Really Works!

by Mark Chatfield

Introduction

Total quality management (TQM) has been one of the major buzz words for improved productivity for almost 20 years. Although TQM is much older than that, the "total quality movement" really picked up steam in the late 1970s and early 1980s when several large American corporations adopted the techniques that enabled the Japanese to be so successful.

The background of TQM is explained in a Federal Quality Institute publication, "Introduction to Total Quality Management in the Federal Government."

From about 1960 to 1990, the United States lost 40 percent of its market share to foreign competitors, while Japan increased its foreign market by 500 percent.

For the Japanese, the secret to success was the implementation of systematic quality efforts to meet or exceed customer requirements and expectations the first time and every time. The three basic principles of TQM are to: focus on achieving customer satisfaction, seek continuous and longterm improvement in all the organization's processes and outputs, and take steps to ensure the full involvement of the entire work force in improving quality.

Some federal departments, primarily the Department of Defense, adopted a TQM approach as early as the mid-70s; however, the federal government formally became a participant in TQM with a presidential executive order in February 1986. That order established a government-wide effort to improve the productivity, quality, and timeliness of government products and services.

TQM began to "catch on" in the United States when some American corporations achieved spectacular results. The Xerox Corporation is a primary example.

Xerox was motivated to launch an all-out effort to improve quality because it was in danger of going out of business. The company had lost 65 percent of its market share of copiers to Japanese competitors. The Japanese copiers were just as good and less expensive. Guided by TQM principles, Xerox regained the market share it had lost, and in 1990, the company won the Baldrige Award.

The Malcolm Baldrige National Quality Award was established in 1987 by the federal government to encourage more American companies to remain competitive and improve their quality. The Baldrige Award is presented annually to companies that excel in quality achievement and quality management, and the award has become the most prominent and publicized symbol of the quality movement in United States.

This article is not a primer on TQM. My purpose is simply to attest, through the experience of the Federal Lands Highway Office (FLH), that TQM works. It is applicable to highway agencies.

Snowy Range Road through Medicine Bow Mountains.

The Washington state Route 130, Snowy Range Road, project is an example of FLH's quality orientation, which emphasizes a focus on customer needs, successful partnerships, and a commitment to a high quality product. The reconstruction of almost 22 kilometers of Route 130 through the majestic Medicine Bow Mountains and over the 3300-meter Snowy Range Pass, approximately 65 kilometers west of Laramie, took six construction seasons and about $11.2 million to complete.

The Debate

For several reasons, many companies that have tried TQM-related approaches have not been successful, and as a result, criticism of TQM is increasing.

Gilbert Fuchsberg, staff reporter for the Wall Street Journal, calls the "total quality movement, one of the biggest fads in corporate management." In his May 14, 1992, article, he also describes TQM as "plenty of talk and not much action." He goes on to say that a study suggests TQM is floundering.

"There are tens of thousands of private and public-sector organizations with quality programs chugging away somewhere within their establishments, and almost every one of them is failing," says James C. Shaffer, vice president and principal of the consulting firm Towers Perrin.

Robert Schaffer, another consultant, says businesses "like lemmings marching to the sea ... are rushing headlong to a destination called total quality."

Even Tom Peters, the guru of corporate management, vents his spleen (his words) by saying things like, "Hangnails? Apply TQM before bed.

Lost market share? Two tablespoons of TQM will do the trick ... [the] infinitely flexible elixir called TQM is not the answer to all of America's vexing business problems."

On the other side of the debate are people like Harry V. Roberts, professor of statistics and quality management at the University of Chicago graduate business school. He says that contrary to critics' beliefs, quality management is helping many companies survive and even prosper. He cites the 1991 Government Accounting Office survey of 20 major U.S. companies showing that many posted an overall average annual improvement in corporate performance after employing quality management techniques. Roberts points out that companies like Xerox wouldn't be here without quality management.

What are we to believe? Some experts deprecate TQM; some praise TQM.

As Peters says, TQM is not a panacea for all problems in management. TQM works when it is the marrow, rather than the mantra, of the organization.

There are many reasons why a TQM effort fails. Chief among these is that the senior managers are not solidly behind the effort. They are looking for immediate solutions rather than long-term quality improvement. They will not truly empower their employees to make changes; they fail to capture the intelligence, imagination, and energies of the entire work force in the pursuit of the company's goals. And most of all, they fail to understand that TQM must be embedded in the culture and environment of the organization and not simply be viewed as a set of specific management techniques and tools. (1)

Many managers and employees have become disillusioned by the three-letter acronym "TQM." However, rejecting concepts that have been proven to work just because they come under the heading "TQM" is, at best, unwise.

A Fad? So What?

William A.J. Golomski, senior lecturer at the University of Chicago and president of a consulting firm, says quality management has been successfully used in the United States since the 1950s, although that fact isn't well recognized.

Consider what Mark Graham Brown, a Baldrige Award examiner, writes in the August/September 1992 issue of Quality and Productivity Management Association's QPMA Council Connection:

"Both quality and the Baldrige criteria have become fads. I read the other day that ASQC [American Society of Quality Control] has doubled its membership since 1987. Just about every company in America is embarking upon some sort of quality or Baldrige-related initiative. For many of these companies, this is a fad. Some are already bored with it and are looking for the next management fad. Others are forced to get involved because their major customers have told them they need to jump on the quality bandwagon. The vast majority of these companies will never really implement total quality and will drop their quality or Baldrige initiatives within a few years. Interest in TQM, Baldrige, and quality improvement in general has peaked because it is a fad.

"... The fact that something is a fad does not make it worthless. Exercise is a fad in America right now also. Most Americans read about the benefits of exercising and join a health club, start jogging, walking, or buy some exercise equipment such as a stationary bicycle or a stair climber. Almost all of these people will not stick to it, however. Regular exercise is hard work, and requires tremendous dedication to keep at it three to five times a week for the rest of your life. The same thing can be said for total quality. It takes a long-term commitment, much effort, a great deal of time, and is something you have to work on forever. Consequently, most drop out. For those companies that have stuck with TQ, and for those individuals who have stuck with their exercise programs, amazing benefits have resulted. Both will live longer, be happier and healthier. The remaining 90 percent of the organizations and individuals will be looking for the newest management book or diet book that promises yet another quick fix to their problems. The individuals will go through yo-yo diet cycles and the organizations will reorganize, lay off employees, and engage in other short-term strategies. The bottom line is that both will remain unhealthy and fail to attain any of their long-term goals."

FLH Quality Improves for Sixth Consecutive Year

The Federal Lands Highway Office is a 600-person organization with three field divisions and a headquarters office. FLH is a key part of the Federal Highway Administration. FLH administers a $500 million annual program and performs direct planning, design, contract awards, and management of roads and bridges on the one-third of the United States that is federally owned.

For six years, FLH has been making every effort to avoid the quick fix syndrome that stymies TQM implementation.

The very first thing FLH's top officials discovered in trying to implement change was the need to get outside their own organization to expand their thinking.

The second thing they learned was to measure progress over a significant period of time so that FLH can demonstrate whether changes are having an impact. In 1989, FLH began measuring its overall orientation to quality, using an assessment developed by the Federal Quality Institute (FQI).

According to FQI, any agency that can achieve a rating between 600 and 800 on their 1,000-point quality assessment scale has "a well-developed, systematic quality management approach with excellent functional integration that has been implemented in most parts of the organization."

With the assistance of a consultant, FLH's Quality Coordination Team conducted the November 1994 FLH quality assessment, and a formal report was written to direct the next FLH Strategic Business Plan.

The 1994 score is about 630 out of a possible 1,000. The average component scores without weighing one more than another is 62 percent; this is up significantly from last year's 53 percent.

The bottom line is this: FLH has improved every year for six years with a significant increase in 1994.

Effective Partnering Saves Big Bucks

The FLH approach to partnering is a specific example of significant improvement through TQM.

In Making Quality Happen, George Labovitz spells out the essence of partnering. "Partnering customer and supplier organizations behave as if they were one company (at least in the areas in which they've agreed to partner), helping to improve each other's work processes and sharing each other's successes and failures." The partners concentrate on the principal goal to satisfy the ultimate customer.

The goal of partnering is to reduce costs by making products and services right the first time and eliminating the waste in time and money to fix deficiencies. The reduction in waste that FLH is achieving with partnering is very encouraging.

One of the most pervasive areas of waste in highway construction and contract administration results from claims by contractors for unresolved disputes. Because resolution requires additional resources, claims are a loselose situation for both the contractor and the contract administrator.

In 1990, before partnering, contractors filed 23 claims totaling $12.4 million. In 1991, as FLH initiated a few formal partnering projects, 12 claims were settled, but 10 more were added for a total of $14.6 million. As of the endof 1992, when partnering was begun and continued on multiple projects, there were virtually no claims (0.04 percent) on the $73 million of contractor earnings for the 13 partnered projects under way. The cost savings for FLH contract administration is estimated at about $2.5 million.

Conclusion

FLH is a much more effective organization now than six years ago. In addition, employee perceptions of quality have also significantly improved. These and other improvements are quantified using organizational performance measures that also satisfy the requirements of the 1994 Government Performance and Results Act.

Specifically, FLH measures three key factors: productivity, external customer satisfaction, and employee (internal customer) satisfaction. Productivity performance measures include the percentage of funds that are used for construction and the degree to which actual completion dates match planned schedules. External customer satisfaction is measured using formal surveys and other feedback, including the evaluation of contractor and public perceptions of FLH work. Internal customer satisfaction is measured using allemployee "town meetings" and a formal cultural survey.

These improvements can be primarily attributed to changes implemented as a result of the office's application of TQM principles and the embracing of these principles by the employees. TQM has the complete, active support of FLH's senior leadership, and with this support and the commitment of leaders and employees to continuous improvement, FLH expects to consistently achieve higher efficiency ratings.

If you would like to have further information about FLH's organizational performance measurement system and how it is linked to strategic and tactical planning, please contact Mark Chatfield, Quality Coordinator, Federal Lands Highway Office, HFL-1, Washington, D.C. 20590; (202) 366-9492; fax (202) 3667495.

References

(1) "Introduction to Total Quality Management in the Federal Government," Federal Total Quality Management Handbook, U.S. Office of Personnel Management, Federal Quality Institute, Washington, D.C., May 1991.

(2) Gilbert Fuchsberg. The Wall Street Journal , May 14, 1992, p. B1:3.

(3) George Labovitz. Making Quality Happen , HarperCollins Publishers Inc., 1993.

Mark Chatfield is the quality coordinator for the Federal Lands Highway Office, and for the past five years, he has led the FLH's Quality Coordination Team. He has been a highway engineer with the Federal Highway Administration for 25 years. He earned a bachelor's degree in civil engineering at New Mexico State University and a master's in public affairs from Kentucky State University. He is a licensed professional engineer in Virginia.

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